FTSE 100 pharmaceuticals firm AstraZeneca and Hutchison MediPharma (HMP), a research and development company majority-owned by Chi-Med, have entered into a global licensing, co-development, and commercialisation agreement for a cancer treatment drug.
Volitinib (also known as HMPL-504), which was discovered and developed in China, will imminently enter Phase I testing.
Under the terms of the agreement, development costs for Volitinib in China will be shared between the two firms, with HMP continuing to lead the development there.
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AstraZeneca, which will lead and pay for the development of the drug for the rest of the world, must now pay $20m to HMP.
HMP will receive up to a further $120m, dependent on the successful achievement of clinical development and first sale milestones.
The agreement also contains possible significant future commercial sale milestones and up to double-digit percentage royalties on net sales, the firm said.
"Volitinib represents a highly attractive global opportunity for AstraZeneca as we seek to develop and commercialise novel, targeted cancer therapies," Susan Galbraith, Head of Oncology Innovative Medicines at AstraZeneca, added.
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